Weekly Client Alert # 14

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TAX Legislation

 

Defining New Term for Depreciation of Fixed Assets

The minimum depreciation period for imported or acquired fixed assets shall be at least one year.

This opportunity is provided to all resident and non-resident profit taxpayers only for investments made before the period of December 31, 2020.

The aforesaid legislative amendment shall allow to benefit from the opportunity of accelerated depreciation for investments made by the end of this year.

The National Assembly at the second reading fully adopted the bill on making amendments to the Tax Code.

Amendment to the law here

 

Defining a New Transaction Exempted from the Value Added Tax

From now on, the provision of services or implementation of functions defined under the RA Law on Financial System Mediator by the Office of the Financial System Mediator will be considered as a VAT exempted transaction.

In the second reading, the National Assembly has fully adopted the bill on making amendments to the Tax Code.

Find more here

 

New Possibility on Disclosure of Information on the Owners of the Securities

From now on, the tax authorities will have access to the information concerning the opening of securities accounts, shares and owners.

In the second reading, the National Assembly has fully adopted the bill on making amendments to the Tax Code.

Find more here

 

New Possibility for Fulfilling Deduction from Profit Tax

It is suggested to reduce the expenses paid by profit taxpayers to individuals from the gross income to 0.5% instead of the previous 0.25%. These expenses include assistance to individuals, catering, organizing social and cultural events for them, and other similar expenses.

The draft of amendments to the law has not yet been included in the agenda of the National Assembly.

Find more here

 

New Procedure for Calculation of Real Estate Tax

It is suggested to tax real estate based on the cadastral value of real estate close (as similar as) to the market value.

The tax amount will be formed based on the cadastral valuation procedure close (as similar as) to the market value of the real estate.

The draft of the amendment to the Tax Code has been approved by the RA Government.

The Draft here

 

Amendments to The Financial Leasing and Regulations Arising Therefrom

The draft suggests:

  • to define and clarify the legal relations of all parties involved in the leasing process, the legal grounds of agreements, types of leasing, the correct definition of residual values;
  • to ensure a unified approach for all participants in the process, particularly relating to the accounting methodology for Lessee, Leasor and Supplier Company;
  • the payment property tax and administrative fines for vehicles that are subject to leasing will be made at the place of registration of the Lessee, instead of Leasor, which will contribute to the growth of community income, etc.

The draft of the amendment to the law has been adopted in the agenda of the National Assembly as per first reading.

Find more here

 

FINANCIAL SPHERE

 

Electronic Communication Between Banks and the Clients Thereof

Hereinafter the communication between banks and their clients (including the provision of deposit transcripts) will be electronic – all information will be circulated via email, except for cases, where the clients demand in written form, that the communication is carried out via postal services (please note that under current regulations such communication is postal, except for cases, where the client asks for electronic communication). At the same time, the mentioned rules on communication will not apply in cases of state of war or state of emergency in Armenia. In particular, in cases, where the state of war or state of emergency has been declared, banks will be entitled to publish information on services provided by them on their official websites or official social network pages, and in case of impossibility thereof – via television or radio. The Draft Laws on Making Amendments to the Laws of RA on Bank Deposits, Consumer Credits and Accommodation Mortgage Credits pass first reading on June 3. 

Find more here, here and here

 

Consumer CREDITS

In the Client Alert circulated on April 13, we addressed the Draft Law on Making Amendments to the Law on Consumer Credits, pursuant to which it was suggested to establish that a consumer shall mention in a credit agreement that he/she acknowledges the actual amount of annual percentage and write down that amount in hand or through electronic means, and the Central Bank would be entitled to establish, by its normative legal acts, mandatory requirements and conditions for those consumer credits, which are entered into for a period of up to three months and for an amount of up to AMD 300,000. On June 4 the Law passed second reading.

Find more here

 

Names of Irresponsible Debtors Will No Longer be Published

Hereinafter the Central Bank will not publish the names of irresponsible debtors. On June 3 the Draft Law on Making Amendment to the Law of the Republic of Armenia on Bank Secrecy passed second reading.

Find more here

 

Payment of Coupons in Foreign Currency

On April 20 we informed about the introduction of the Draft Law on Making Amendments to the Law on Currency Regulation and Currency Control, which is intended to permit payments in foreign currency of coupons of bonds expressed in foreign currency, as well as transfers associated with repo agreements and derivatives. On June 3 the Draft Law passed first reading.

Find more here

 

New Thresholds for Compensation of Bank Deposits of Individuals

On April 27 we informed about introduction to the Parliament of a Draft Law, which proposes that the maximum threshold of compensation of bank deposits made by individuals in case of insolvency of a bank may increase and become AMD 16 million for dram deposits and AMD 7 million for foreign currency deposits (the threshold is currently AMD 10 million for dram deposits and AMD 5 million for foreign currency deposits). On June 3 the Draft Law on Making Amendments to the Law of the Republic of Armenia on Guaranteeing Compensation of Bank Deposits of Natural Persons passed first reading.

Find more here

 

Widening the Scope of Persons Eligible to Apply to the Financial System Mediator

The Draft Law presented by the parliamentary fraction “Bright Armenia” on Making Changes and Amendments to the Law of the Republic of Armenia on Financial System Mediator, which envisages that hereafter not only individuals but also organizations and sole entrepreneurs falling into the scope of the micro-business shall be entitled to apply to the Financial System Mediator, passes second reading on June 3.

Find more here